The Budget confirmed that the main rate of corporation tax will rise from 19% to 25% on 1 April 2023 but the small profits tax rate will stay at 19% where the company’s profits do not exceed £50,000.
When the current Prime Minister was Chancellor, he announced an increase in the main rate of corporation tax to 25% to apply to profits above £250,000 from 1 April 2023. Under the previous administration this decision was reversed but the 25% rate will now apply next year.
The new Chancellor Kwasi Kwarteng has decided to keep the main rate of corporation tax at 19% at all profit levels.
Depending on your profits, the new corporation tax rates may not affect you at all. Even if your bill does rise, there are steps you can take to reduce the burden.